Do you stress about your financial situation?
Sadly, this is not unusual for most Americans.
Whether we realize it or not, many of us make small choices every day that significantly help or hurt our ability to meet our short and long term financial goals.
Far too many people are hitting their sixties without a retirement plan in place. This can lead to significant problems for the final decades of their lives. 1 in 3 Baby Boomers has less than $1,000 saved! To avoid this issue, it is essential that you start taking control of your financial situation today. There's no time to wait, so this article will help you get started.
The Six Steps for Achieving Financial Independence
If you want to gain more control over your finances both personally and for your business, the following steps will help you get started.
1. Set Crystal Clear Financial Goals
Where do you want to be financially five, ten, twenty years from now? Make your goals as detailed as you can to eliminate any ambiguity. Do you want to own your home? Have enough money set aside to provide you with the financial independence that you need for retirement? Do you know what your debt free date is? Knowing what you are aiming for financially will make it much easier to monitor your progress along the way and adjust when necessary.
2. Use Personal Finance Tools Like Mint.com
Increasingly, your life is becoming tied to your cell phone, so why not use it to manage your finances as well? Mint.com is a mobile app designed to make managing your money easier than ever. The app lets you link to multiple bank accounts, monitor your investments, and pay off bills, all through a secure network. Having your financial goals and all of your finances aggregated in one place will put you in the best position to meet your financial milestones and goals.
3. Reduce unnecessary Taxes and Fees
Fees and Taxes might seem small on their own, but together they can take a significant chunk out of your lifetime earnings if not managed effectively. When you add all the taxes you pay, (Federal, State, Local, Sales, etc.), and all the fees, (Credit Card, 401K, IRAs, Bank, etc.), they could be draining between 50%-75% of your lifetime income! One action that you can take is to have a financial adviser and an accountant. They can help you to proactively put a plan in place to eliminate or reduce these costly fees and ensure that you keep your money in your pocket instead. There are several companies, (who will try later to solicit your business), that provide online resources for you to check the fees in your savings plans. You can visit the Fee Checker on the following website: Http://www.ShowMetheFees.com. We have no affiliation. Take advantage of the information; you decide whether or not to give them your business.
4. Hire a Financial Team
Not only is this a smart idea for your business, but it is also invaluable for your personal life. Meeting with experts on a regular basis will teach you more about managing your finances than hours of research on your own. Advisors will help you know when you need to make a change in your financial strategy as your life and career goals change. Here are a few financial team members to consider.
A Bookkeeper: Relatively inexpensive and can save you time and money come tax time.
An Accountant: Can help you to establish proactive tax, spending and saving strategies to maximize your earnings.
A Fiduciary Financial advisor: By law, they work in your best interest and can help you to create a more efficient financial plan.
5. Invest Wisely
Only setting your money aside in a bank account may cause you to lose out to inflation. So, the better idea is to put your money to work for you through wise investments. Whether you chose to work with a personal stock broker or manage your finances is a personal choice, but keep in mind that diversifying your portfolio and keeping your money in place for decades will lead to financial gains. Remember, the younger you start, the better your returns will be, as you will have more time to gain the advantage of years of compound interest. You will also have to decide what investment vehicles are best for you. Is it a traditional 401K, is it an IRA, or maybe even a Roth IRA? Again, your accountant and your Fiduciary Financial Advisor (one who is legally obligated to your best interest) can help you to make the right decisions.
6. Keep Giving Back
In many ways, the biggest benefit of saving more money is that you have more to give. Stay consistent with your charitable donations, and you will experience the joy of your smart financial moves making other lives better, too.
Taking control of our finances does not need to be difficult, but we must make the small choices every day that can help us to meet our financial goals. We hope that these 6 Steps were helpful and that you take the necessary actions towards financial independence. If you have additional steps that you would like to share with the group, or any comments in general, please post them below. Thanks!